Northmarq research featured in GlobeSt.: Single-family own vs. rent gap widens
Originally published in GlobeSt.
Those wishing to live in a single-family home found the price to rent one roughly $825 per month less than to buy one, based on a standard mortgage payment, according to a new report from Northmarq.
This is a spike of approximately $275 per month from the same period at the end of 2022.
Vacancy rates for single-family rentals were elevated throughout much of 2023, Northmarq reported, peaking at 8 percent during Q1 and ending the year at 7.8 percent.
This is a 60 basis points average rise, and it is about 300 basis points higher than its 2021 low.
Rents on average were essentially flat, although Charlotte and San Antonio topped the list for rent growth posting increases of more than 2.5 percent last year, highest in the country.
Two other boom markets – Phoenix and Tampa—recorded modest declines in the past 12 months.
The single-family build-to-rent (SF BTR) market has endured many of the same dynamics as the multifamily industry.
Supply growth has been on a steep upward trajectory for the past few years, Northmarq said, with deliveries spiking by an average of more than 20 percent in each of the past two years.
Dallas-Fort Worth and Phoenix are the top two markets for new development, combining to account for more than 20 percent of the total single-family build-to-rent units currently under construction, Northmarq said.
This year, completions overall are expected to closely track levels recorded in the prior year.
“While activity slowed in the second half of 2023, construction starts were elevated throughout 2021 and 2022, and the longer development timelines for single-family rentals compared to traditional apartments is resulting in a full construction pipeline,” according to the report.
Northmarq said some home builders have altered their strategy for their product, adjusting it from homes to buy to homes to rent.
The story was written by Richard Berger and appeared on GlobeSt.com on Feb. 21, 2024. © 2024 ALM Global Properties, LLC. All rights reserved.
View Northmarq's 2024 National Multifamily Outlook report here.